Seanad debates

Tuesday, 11 February 2014

Public Sector Reform: Statements

 

5:25 pm

Photo of Sean BarrettSean Barrett (Independent) | Oireachtas source

I am glad to have the Minister's reassurance on this.

A series of public expenditure reforms have been implemented to bring greater structure, scrutiny and openness to budgeting and I support the Minister on this. He has made progress in his reports on getting outputs instead of the traditional budgeting, whereby spending more gives Ministers a speech to make when they are cutting the ribbon, when they will state they spent more than the previous Government. Did it accomplish anything? Is it why we have a debt to GDP ratio of 120%? Turning inputs into outputs is important, as the Minister stated, and he also mentioned improving outcomes. I support the Minister wholeheartedly. We must measure the impact of public spending which will give us the reform dividend.

On the capital side we must move to publishing independently-conducted appraisals in advance and not have alleged appraisals prepared by the lobbyists, beneficiaries and promoters. Robbing Peter to pay Paul usually has the support of Paul, and Paul's lobby group, consultants and beneficiaries, but it is not the point. We must consider these issues from the point of view of society overall. This type of scrutiny is more and more important.

I would like to see what went on at Irish Water as the last of the old brigade and not part of the new reform. Why did we not know everything upfront? We could have had a much more informed discussion on whether replacing 34 local authorities would lead to the benefits we all seek.

I am concerned that of late we do not see as much regulatory impact analysis accompanying legislation, stating what legislation is supposed to do and how to measure it. The memorandum on the Irish Water legislation did not include the financial statement.

There should be more cost-benefit analyses and output measurements.

The tax aspect should be included. I worry that we have guillotined the Finance Bill in each of the last two years. There are huge giveaways of money, hard-earned by collecting taxes, and we do not know whether the benefits to society of those loopholes and so forth are worth the costs. That should be brought under scrutiny. One can say the Seanad does not have financial powers and can only make recommendations, but even then our thoughts on tax loopholes have been curtailed. The recent concern in unlikely places, such as the Organisation for Economic Co-operation and Development, OECD, and in the United States in President Obama's State of the Union address, is that part of the reason for the growth in inequality, which bodes ill for so much in society, is that people with enough tax lawyers and accountants can avail of those tax loopholes while the rest of us do not have that facility. Living in a society where inequality is increasing is not something to which many of us aspire. That must be examined.

I share the Minister's concerns about lobbying. Mr. Vito Tanzi, who had a high post in the International Monetary Fund, IMF, is concerned that not just Ireland but almost every country has developed a capacity to live beyond its means by borrowing. His list of things to beware of represent part of a public sector reform proposal. They include always listening to the beneficiaries rather than society as a whole, an entitlement culture and the power of lobbyists. The fact is that when we move into free trade, projects are proposed that claim to have a great multiplier effect. The fiscal council has said this is not the case - as this is a small, open economy, the money leaks out of the colander once it is poured in - but we still have lobby groups saying, "You have lost millions, Minister, but we will make you rich." The ease with which certain people got bailouts during the crisis must be reformed. There is also the use of "do nothing" options and avoiding asset bubbles. I am concerned that in the print media, in particular, there is a confusion of asset price increases with real economic growth and the type of real productivity this Minister is seeking in the public and private sectors. There are also the issues of regulatory capture or the capture of regulators, the fiscal termites who undermine the tax system by chomping away at it and the sheer complexity of government. We must simplify it.

I have always liked the Minister's visits to the Chamber to discuss this reform package. It is necessary to continue with the reform because there is still a debt-to-GDP ratio of 120%. I still think about matters such as the complaints about the high number of children per class. It is far more than when one divides the number of teachers on our payroll by the number of students who are registered. Have we diverted valuable teaching staff into doing administrative tasks and so forth? The same applies to health. We doubled the number of staff in the health service between the 1980s recession and the peak, from 55,000 to 110,000. With that massive increase in staff, why do we have unacceptable waiting times now? There must be an emphasis on the outputs rather than the inputs.

Separating the Minister's Department from the Department of Finance was a good idea, because they have different tasks. The reform agenda continues, and I look forward to the Minister's proposals on lobbying and whistleblowing.

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